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Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations? Comment

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  • Wen, Yi

    (Cornell U)

Abstract

The neoclassical effects of permanent technology shocks on employment is re-investigated. Contrary to Jordi Gali's (1999) assertion published in this Review, I show that standard neoclassical theory is fully capable of explaining the stylized fact that positive permanent technology shocks reduce employment and that positive transitory nontechnology shocks increase labor productivity.

Suggested Citation

  • Wen, Yi, 2001. "Technology, Employment, and the Business Cycle: Do Technology Shocks Explain Aggregate Fluctuations? Comment," Working Papers 01-19, Cornell University, Center for Analytic Economics.
    • Handle: RePEc:ecl:corcae:01-19
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    File URL: https://cae.economics.cornell.edu/comment1.pdf
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    References listed on IDEAS

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    1. Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-283, April.
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    6. S. Rao Aiyagari, 1994. "On the contribution of technology shocks to business cycles," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 18(Win), pages 22-34.
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    Cited by:

    1. Galí, Jordi & Rabanal, Pau, 2004. "Technology Shocks and Aggregate Fluctuations: How Well Does the RBC Model Fit Post-War US Data?," CEPR Discussion Papers 4522, C.E.P.R. Discussion Papers.
    2. Bharat Trehan, 2003. "Productivity shocks and the unemployment rate," Economic Review, Federal Reserve Bank of San Francisco, pages 13-27.
    3. Martial Dupaigne & Patrick Feve, 2009. "Technology shocks around the world," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(4), pages 592-607, October.
    4. repec:ebl:ecbull:v:5:y:2004:i:3:p:1-8 is not listed on IDEAS
    5. Patrick Fève, 2004. "Technology Shock and Employment under Catching up with the Joneses," Economics Bulletin, AccessEcon, vol. 5(3), pages 1-8.

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